China Vanke suffers first interim loss in two decades as home sales plunge 38%

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The loss came in 9.4 per cent higher than the top of a range the company defined in a warning last month

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Residential buildings under construction at China Vanke’s Langshi Flower Language development in Shanghai, pictured on May 24, 2024. Photo: Bloomberg

Yulu Ao

Published: 9:00pm, 30 Aug 2024

China Vanke, once China’s second-largest home builder, reported an interim loss for the first time in two decades, underscoring the depth of damage the country’s long property crisis continues to cause.

The Shenzhen-based developer reported a net loss of 9.85 billion yuan (US$1.4 billion) for the first six months of 2024, swinging from a profit of 9.87 billion yuan for the comparable period in 2023, according to a filing with the Hong Kong stock exchange late on Friday.

The company’s first interim loss since 2003 came in 9.4 per cent higher than the top of a range the company defined in a profit warning last month.

The loss came after major mainland developers Shimao Group, Kaisa Group and Fantasia Holdings all reported widening losses on Thursday, delaying their efforts to overcome a debilitating debt crisis. Sunac, which reorganised its debt recently, is facing a similar predicament.

China Vanke’s revenue fell by 29 per cent year on year to 142.8 billion yuan, dragged by discounts offered to homebuyers in an effort to reduce inventory, the company said.

Contracted home sales declined 37.6 per cent year on year to 127 billion yuan. The developer will not pay an interim dividend.